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  Can Merkel Stop Bush?: Iran Crisis To Top Agenda of US Trip

Can Merkel Stop Bush? Iran Crisis To Top Agenda of US Trip

Part 2: Strong-Arming Germany

Martin Schulz, a member of the SPD and the leader of the Social Democratic group in the European Parliament, made his position even clearer: "I expect Ms. Merkel to dissuade Bush from embarking on any aggressive strategy against Iran. The chancellor must say to him clearly: 'Not with us!'"

Key foreign policy experts in Merkel's party, the Christian Democratic Union (CDU), agree with these demands. Until recently Ruprecht Polenz, the chairman of the Foreign Affairs Committee in the German parliament, the Bundestag, had argued that military options against Iran should at least not be ruled out -- essentially as a last-resort means of applying pressure. But even Polenz now fears that the military option could increasingly be taking shape in the minds of American politicians. "We must warn decisively against this," says Polenz, adding that he assumes that Merkel will address the consequences of military action in her discussions with Bush.

CSU foreign policy expert Guttenberg also wants clarity. "A military conflict with Iran must be avoided at all costs," says Guttenberg. "We have to make this clear to the Americans."

The lessons of history are behind German politicians' demands for openness. When US President Bush came to Berlin in May of 2002, the Germans feared a US attack on Iraq. Then Chancellor Schröder received his American counterpart like an old friend. When the two politicians went to a restaurant together, Bush ordered apple strudel and Schröder had a bratwurst with curry sauce.

Back at the Chancellery, the two discussed the campaign in Afghanistan, the war against terrorism and Germany's prospects in the 2002 football World Cup. "I'll be happy when we make it past the preliminary round," Schröder told Bush. It was only near the end of their conversation that the chancellor carefully asked Bush whether it might not be a good idea to discuss the situation in Iraq, adding that the waiting press would want to hear a statement. An official who took part in the talks recalls that Bush was evasive and told Schröder that because nothing had been decided there was nothing to discuss.

Schröder seemed relieved and dropped the issue. He stood silently next to Bush during the press conference while the president insisted that he had "no war plans on the table, and that's the truth."

The chancellor came to his senses about two months later when he voiced his sharp criticism of Bush and the impending Iraq invasion during the campaign for Germany's parliamentary elections. "This country will not make itself available for any adventures under my leadership," he said. The different interpretations of the two leaders' discussion in Berlin would only intensify the dispute between the Germans and the Americans. The Americans insisted that Schröder had given Bush the "feeling" that he would not use the issue of Iraq against the United States, at least not during the election campaign. The Germans, for their part, accused Bush of having left them in the dark about his plans.

Steinmeier was Schröder's closest political advisor at the time. Now that he is the foreign minister, he does his best to avoid such fatal misunderstandings. At the SPD's party convention, he warned the United States against "military adventures." During a four-day visit to the Middle East last week, Iran was at the top of the agenda in every meeting. "When I warn against military adventures," Steinmeier said in Tel Aviv, "it isn't party rhetoric. A war against Iran would have devastating consequences for the entire region."

The foreign minister fears that the debate in the United States is becoming increasingly narrow. "Significant battalions," he said, are clearly "in favor of a military strike." Senior officials at the Foreign Ministry have told Steinmeier that politicians in Washington are clearly preparing for a showdown.

But the issue still remains controversial within the US administration. The Germans are pinning their hopes on Secretary of State Condoleezza Rice, who was still clearly in favor of war when it came to the Iraq conflict. But this time Rice appears to be allied with the opponents of war against Iran. According to Steinmeier, his American counterpart is embroiled in a bitter political dispute with the pro-war faction, which also has supporters in the White House. Germany, says Steinmeier, must do everything it can to throw its support behind Rice.

The proponents of a peaceful solution are running out of time. In September, the veto powers in the UN Security Council -- the United States, Russia, China, Great Britain and France -- along with Germany, agreed to wait until the end of November before imposing further sanctions. The Germans had pushed to delay the decision because Russia and China were not willing to agree to further sanctions.

In mid-November, the International Atomic Energy Agency (IAEA) will submit a report on whether the regime of Iranian President Mahmoud Ahmadinejad is finally prepared to fully disclose its nuclear program. If the Vienna-based agency concludes that Ahmadinejad is not willing to cooperate, the UN Security Council could impose a third round of even sharper sanctions.

The Germans would be willing to support a further tightening of sanctions against Iran. Merkel and Steinmeier hope that tougher sanctions will be enough to avert an American military strike. This would put Germany in the difficult position of having to convince the Russians to apply more pressure and the Americans to be more patient.

The current sanctions, which, for the most part, are being enforced solely by the Americans, are already extensive. For roughly the past two years, the Bush administration has been sending Deputy Secretary of the Treasury Robert Kimmit and Under Secretary of the Treasury Stuart Levey to the headquarters of German corporations, where they have politely but clearly informed CEOs that it would be in their best interest to abandon their dealings with Iran, which often go through Dubai. Otherwise, according to Kimmit and Levey, the United States will not hesitate to disclose their companies' business relationships with "rogue states."

Klaus-Peter Müller, the spokesman of the board of Commerzbank, is one of a group of German executives who has spoken out strongly against being pressured by the Americans. His bank, he told US Secretary of the Treasury Henry Paulson at the World Bank's annual meeting in Singapore last year, was not willing to abandon its customer relationships "on command" or on the basis of "vague suspicions."

Several months later the Wall Street Journal confronted Frankfurt-based Commerzbank over its dealings with Iranian banks that the US government suspects of involvement in the funding of terrorist groups.

Müller, concerned about the repercussions, gave in and immediately cancelled all transactions with Iran denominated in US dollars. But this wasn't enough for the Bush administration. Commerzbank, fearful of the draconian penalties the US Securities and Exchange Commission (SEC) could impose, relented and also cancelled its euro transactions with Iranian partners.

Deutsche Bank, another major German bank, found itself in a similar situation this summer when the SEC included it on a list of companies doing business in states that sponsor terrorism.

The SEC justified its controversial actions by stating: "No investor should ever have to wonder whether his or her investments or retirement savings are indirectly subsidizing a terrorist haven." US government pension funds have long been under pressure to make their investments "terror-free" and to divest all "objectionable" stocks.

The CEO of German insurance and financial giant Allianz and his senior financial executives were also summoned to Washington, where they were told, in no uncertain terms, that the group, which includes Dresdner Bank, is expected to abandon its dealings with Iran immediately.

Merely the promise to comply was not enough for the Americans. They forced German banks to hire major US law firms to certify that they had indeed cut off all ties to Iranian business partners. The Germans were expected to pay the resulting millions in legal fees.

German banks have come under the most pressure, because without them other German companies would be hard-pressed to gain access to the Iranian market. Large companies doing business in the United States are already unwilling to do business with Tehran, while smaller companies are essentially unable to pursue Iranian deals because there are no banks available to process their payment transactions.

But German efforts are still not enough for the Americans or, for that matter, for the Israelis. Merkel and Steinmeier have tried to dispel doubts about their resolve in the fight against the Iranian atom bomb. But while in Israel last week, the German foreign minister was forced to listen to Prime Minister Ehud Olmert and Foreign Minister Zipi Livni tell him that there is still plenty of room for restrictions when it comes to German trade with Iran. The Israelis told Steinmeier that they expected a greater commitment from Germany.

Merkel is willing to provide that commitment. In her speech before the UN General Assembly in late September, she said: "If Iran were to acquire the nuclear bomb, the consequences would be disastrous -- first and foremost for the existence of Israel, secondly for the entire region and ultimately for all of us in Europe and the world who attach any importance to the values of liberty, democracy and human dignity." Germany, she said, will "firmly advocate additional, harsher sanctions."

The chancellor knows that such an embargo may have to be imposed outside the framework of the UN if veto powers Russia and China refuse to cooperate. To keep the United States from launching a military attack, Merkel and Steinmeier may also have to accept European Union sanctions not approved by the UN Security Council.

Whether this would be enough for Washington remains to be seen. Republicans, in particular, see the Europeans as being soft on terror and as undependable allies in the war against terrorism. Merkel's greatest hopes lie in the possibility that Bush will at least pay attention to public opinion. Although three-quarters of US citizens believe that Iran is building a nuclear weapon, two-thirds of Americans are opposed to military strikes.

RALF BESTE, KONSTANTIN VON HAMMERSTEIN, RALF NEUKIRCH, WOLFGANG REUTER

Translated from the German by Christopher Sultan